Reliance Infra stocks fall 19% in 6 sessions: Here's why
What's the story
Reliance Infrastructure and Reliance Power have witnessed a sharp decline in their stock prices, plummeting by as much as 19% in the last six trading sessions. The fall comes amid an ongoing investigation into an alleged ₹17,000 crore loan fraud involving these Anil Ambani-led companies. Today alone, Reliance Infrastructure shares fell over 4% to hit a low of ₹267, while Reliance Power stocks dropped by 5% to reach a low of ₹43.
Investigation
ED interrogates Anil Ambani in loan fraud case
The Enforcement Directorate (ED) recently interrogated Ambani as part of its money laundering investigation linked to the alleged bank loan fraud. He has reportedly sought seven days to provide documents related to the queries raised by the ED. The agency is also set to question Amitabh Jhunjhunwala, a former close aide of Ambani, and Sateesh Seth from Reliance Group this week.
Fraud
Alleged loan fraud involves 3 group companies and 20 lenders
The alleged loan fraud involves loans given to Reliance Home Finance Ltd, Reliance Commercial Finance Ltd, and Reliance Communications. These loans, amounting to around ₹17,000 crore, have reportedly turned into non-performing assets (NPAs), involving nearly 20 lenders. Among them are State Bank of India, UCO Bank, ICICI Bank, Axis Bank, HDFC Bank, Bank of India, and Punjab and Sind Bank.
Regulatory findings
SEBI finds evidence linking Reliance Infra to loan fraud
The Securities and Exchange Board of India (SEBI) has found evidence linking Reliance Infrastructure to the alleged loan fraud. Documents submitted by Credit Link Capital Services (CLE) to Yes Bank identified Reliance Infra as a promoter. Internal documents also described CLE as a "group company." Further, bank accounts operated by CLE had email IDs with "@relianceada.com" domain associated with the Reliance ADA (Anil Dhirubhai Ambani) Group, corroborating its connection with Ambani's companies.